SOURCE: TXP Corp.

November 14, 2008 15:33 ET

TXP Announces Results for the Third Quarter of 2008

GPON ONT Sales Gain Momentum in U.S. and Abroad

RICHARDSON, TX--(Marketwire - November 14, 2008) - TXP Corporation (OTCBB: TXPO), an Original Design Manufacturer (ODM) for the telecommunications industry, today announced financial results for the three months ended September 30, 2008.

Michael C. Shores, President and Chief Executive Officer of TXP, stated, "We are encouraged about our planned merger with Cambridge Industry Group (CIG) as our combined companies will now offer the widest and most advanced selection of optical network terminals (ONT) in the fiber-to-the-home (FTTH) industry. We believe that our collective capabilties will enable us to more readily support the increasing demand for cost-effective, interoperable ONTs, strengthening our foothold as a leading market provider. The merger remains on track and we look forward to hopefully completing the transaction by year end."

"The progress in our ONT division is best illustrated by the three-fold increase in revenue we achieved related to Gigabit Passive Optical Network (GPON) ONT product sales for the three months ended September 30, 2008. Although overall ONT revenues remain small, these sales represent a significant increase in active pilot programs and field trials underway with major global carriers. As such, we anticipate these pilot programs and field trials will convert into broad deployment of our technology."

"Overall, we believe we are well-positioned to capture a meaningful share of the FTTH market. Household broadband connections are expected to increase 43% by 2012 as the U.S. is currently the fastest growing market for FTTH worldwide. We were honored to be included in the September 2008 edition of Broadband Properties Magazine as one of the key players poised to take advantage of this acceleration in FTTH deployment."

Total revenue for the third quarter of 2008 was approximately $2.68 million, compared with approximately $2.67 million for the same period in 2007. Revenue increased within both the ONT and Retrofit Solutions businesses, offset by a small decline in the prototyping business. Operating loss for the third quarter was approximately $1.94 million, compared to operating loss of approximately $1.70 million for the same period last year. Net income for the third quarter of 2008 was approximately $3.03 million, or $0.03 per share, compared to net loss of approximately $1.32 million, or $0.01 per share, for the same period in 2007. Net income in the third quarter of 2008 included a non-cash gain of approximately $6.31 million and 2007 included a non-cash gain of $0.87 million related to change in fair value of derivative financial instruments.

Full results are available in the company's quarterly report on Form 10-Q for the three and nine months ended September 30, 2008 that was filed with the Securities and Exchange Commission on November 14, 2008.

About TXP

TXP is an Original Design Manufacturer (ODM) for the telecommunications industry. Based in Richardson, Texas, TXP has three primary business units: TXP-Prototyping Solutions, TXP-ONT Solutions and TXP-Retrofit Solutions. TXP-Prototyping Solutions provides pre-manufacturing services for the electronics industry that help Original Equipment Manufacturers (OEMs) bring products to market both faster and more cost effectively. TXP-ONT Solutions develops and markets, via an ODM model, a line of Carrier-Class CPE products including home gateways and the world's broadest independent family of ONT products to both OEMs and ILECs. ONTs are used in FTTH-based services to terminate the passive optical network at the home or business location, and enable integrated voice, video and high-speed internet access. TXP-Retrofit Solutions provides custom engineered kits that enable ILECs to upgrade their local access service delivery infrastructure at minimum cost and time, enabling a wide range of next generation telecom platforms to easily fit into the variety of remote OSP cabinets that have been broadly deployed over the last 30 years. For more information visit: www.txpcorp.com

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements which are not historical facts contained in this press release are "forward-looking statements" that involve certain risks and uncertainties including but not limited to risks associated with the uncertainty of future financial results, additional financing requirements, development of new products, government approval processes, the impact of competitive products or pricing, technological changes, the effect of economic conditions and other uncertainties detailed in the company's filings with the Securities and Exchange Commission which may cause actual results, performance and achievements of the company to be materially different from any future results, performance or achievements expressed or implied.


                             TXP CORPORATION
                        CONSOLIDATED BALANCE SHEET
                 September 30, 2008 and December 31, 2007


                   ASSETS                            2008         2007
                                                  -----------  -----------
                                                  (unaudited)   (audited)
Current assets
  Cash                                            $   416,000  $   210,000
  Accounts receivable, net of allowance of
   $19,000 and $23,000 as of September 30, 2008
   and December 31, 2007.                           1,253,000    1,708,000
  Inventory                                         2,059,000    1,772,000
  Other current assets                                327,000      212,000
                                                  -----------  -----------
   Total current assets                             4,055,000    3,902,000
                                                  -----------  -----------

Property and equipment, net                         2,489,000    2,641,000

Other assets                                           77,000      140,000
                                                  -----------  -----------

  TOTAL ASSETS                                    $ 6,621,000  $ 6,683,000
                                                  ===========  ===========

           LIABILITIES AND STOCKHOLDERS' DEFICIT

Current liabilities
  Current maturities of notes payable             $    57,000  $   144,000
  Current capital lease obligations                    71,000      120,000
  Lines of credit                                   5,084,000    3,300,000
  Accounts payable                                  1,638,000    1,239,000
  Deferred revenue                                          -       17,000
  Accrued expenses                                  1,473,000      704,000
                                                  -----------  -----------
   Total current liabilities                        8,323,000    5,524,000
                                                  -----------  -----------

Notes payable, net of current maturities               74,000

Capital lease obligations, net of current
 obligations                                          120,000      165,000

Convertible debentures, net of unamortized
 discount of $6,845,000 and $3,370,000 as of
 September 30, 2008 and December 31, 2007,
 respectively.                                      2,654,000    1,630,000

Derivative financial instruments, net of current
 obligation                                         9,743,000    5,178,000

Deferred tax liability                                 48,000       48,000
                                                  -----------  -----------

  TOTAL LIABILITIES                                20,962,000   12,545,000
                                                  -----------  -----------

STOCKHOLDERS' DEFICIT
  Common Stock, $.001 par value, 300,000,000
   authorized, 116,966,428 and 116,584,428 shares
   issued and outstanding as of September 30,
   2008 and December 31, 2007, respectively.          117,000      117,000

  Additional paid-in capital                        6,708,000    8,133,000
  Accumulated deficit                             (21,171,000) (14,117,000)
  Accumulated other comprehensive income                5,000        5,000
                                                  -----------  -----------

  TOTAL STOCKHOLDERS' DEFICIT                     (14,341,000)  (5,862,000)
                                                  -----------  -----------

  TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT     $ 6,621,000  $ 6,683,000
                                                  ===========  ===========



                  CONSOLIDATED STATEMENTS OF OPERATIONS
        Three Months Ended September 30, 2008 and 2007 (unaudited)


                        Three Months Ended           Nine Months Ended
                           September 30,               September 30,
                        2008          2007          2008          2007
Revenues
Prototyping and
 assembly           $    866,000  $  1,016,000  $  3,211,000  $  3,644,000
Material management
 services                845,000       896,000     3,210,000     2,870,000
Retrofit solutions       603,000       331,000     1,268,000       809,000
Product and accessory    363,000        95,000       796,000       123,000
Design and development         -       327,000             -       699,000
   Total revenues      2,677,000     2,665,000     8,485,000     8,145,000

Cost of sales          2,210,000     1,810,000     6,290,000     5,267,000

Gross profit             467,000       855,000     2,195,000     2,878,000

Costs and expenses
Selling, general
 and administrative    1,303,000     1,243,000     4,470,000     3,493,000
Research and
 development           1,053,000     1,271,000     3,764,000     3,278,000
Depreciation              48,000        44,000       165,000       113,000
   Total costs and
    expenses           2,404,000     2,558,000     8,399,000     6,884,000

Operating loss        (1,937,000)   (1,703,000)   (6,204,000)   (4,006,000)

Other income (expense)
Interest expense, net (1,335,000)     (488,000)   (2,825,000)   (1,189,000)
Change in fair value
 of derivative
 financial
 instruments           6,305,000       869,000     3,424,000     2,041,000
Loss on impairment
 of fixed assets               -             -      (196,000)            -
Gain on the early
 extinguishment of
 debt                          -             -    (1,253,000)            -
   Total other
    income             4,970,000       384,000      (850,000)      855,000

Income (loss) before
 income taxes          3,033,000    (1,319,000)   (7,054,000)   (3,151,000)

Income tax expense             -             -             -             -

Net income (loss)   $  3,033,000  $ (1,319,000) $ (7,054,000) $ (3,151,000)

Comprehensive
 income (loss)      $  3,033,000  $ (1,319,000) $ (7,054,000) $ (3,151,000)

Basic earnings
 (loss) per share   $       0.03  $      (0.01) $      (0.06) $      (0.03)

Diluted earnings
 (loss) per share   $       0.03  $      (0.01) $      (0.06) $      (0.03)

Basic weighted
 average shares
 outstanding         116,864,230   113,013,908   116,786,584   108,374,698

Diluted weighted
 average shares
 outstanding         116,864,230   113,013,908   116,786,584   108,374,698

Contact Information

  • Media:
    Paul Forzisi
    TXP Corporation
    (214) 575-9300

    Investor Relations:
    David K. Waldman / Klea K. Theoharis
    Crescendo Communications
    (212) 671-1020